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Revocation of acceptance of trade marks – a powerful tool

A recent Federal Court decision of, has confirmed that the Registrar of Trade Marks has broad powers under the Trade Marks Act 1995 (the TMA) to revoke acceptance of a trade mark application and provides guidance on what factors are relevant in exercising that power. The case also demonstrates reluctance on the part of the Federal Court to intervene with the Registrar's power under the relevant section (section 38) of the TMA.

In this case, the Registrar ordered that acceptance of two applications for registration filed by the Applicant, 1-800-FlowersCom, Inc ("1-800-Flowers") be revoked and re-examined. There is no right of Appeal from the decision of a Registrar to revoke acceptance under section 38 but rather than abide by the outcome of the re-examination, 1-800-Flowers applied to the Federal Court under the Administrative Decisions (Judicial Review) Act 1997 (Cth) ("the ADJA Act") seeking orders quashing the Registrar's decision and directing the Registrar to refrain from taking any steps to implement it.

Complaint by Flowerscorp Pty Ltd

In early December 2010, 1-800-Flowers applied to register two composite marks consisting of the numerals and words 1-800-FLOWERS.COM and incorporating a stylised image of a tulip:

Via the Trade Mark Headstart service, the Registrar confirmed that the 1800 FLOWERS.COM Marks would be accepted. However, in February 2011, after the 1800 FLOWERS.COM Marks had been accepted, the solicitors for a third party, Flowerscorp Pty Ltd wrote to the Registrar complaining that the applications had been accepted without raising any citations based on earlier filed trade marks owned by Flowerscorp which included the numerals and words 1300 FLOWERS, examples of which include:

Flowerscorp's main complaint was that acceptance of the 1800 FLOWERS.COM Marks was inconsistent with examination of its own recently filed applications. 1-800-Flowers was the owner of a prior registration for the composite mark 1-800-FLOWERS.COM & tulip logo (the Prior Tulip Mark) (for a narrower range of goods than the current application). Between November 2008 and February 2010, Flowerscorp had applied to register nine trade marks bearing the name 1300 FLOWERS ("the 1300 FLOWERS marks") and Flowerscorp's Prior Tulip Mark had been cited against acceptance of all of these applications.

As a result of Flowercorp's complaint, a Hearing was conducted before a delegate of the Registrar and at the Hearing the delegate decided to revoke acceptance of the 1800 FLOWERS.COM Marks under section 38 of the TMA. Section 38 provides the Registrar with power to revoke acceptance for registration of a trade mark application when satisfied it is reasonable to do so, taking into account of all the circumstances. The primary reason for revoking acceptance was that the Examiner failed to identify the 1300 FLOWERS marks.

Grounds for judicial review of the Registrar’s decision to revoke acceptance

1-800-Flowers claimed that the Registrar's decision was an improper exercise of its power because:

The Registrar failed to take into account relevant considerations.

The decision was unreasonable.

1-800-Flowers also claimed that the Registrar identified a wrong issue which affected the purported exercise of power under section 38 and amounted to an error of law.

Was there a failure to take into account relevant considerations?

1-800-Flowers argued that the delegate had failed to take into account the Prior Tulip Mark and another prior registration (which also featured 1-800-FLOWERS), which were substantially identical or deceptively similar to the 1800 FLOWERS.COM Marks. However, the Federal Court found that an administrative decision maker was not required to consider every piece of relevant evidence. Moreover, the delegate did refer to the two prior marks (albeit not as the basis for finding that the applications should not have been accepted).

1-800-Flowers also argued that the delegate fell into error because once he formed the view that the 1800 FLOWERS.COM Marks were deceptively similar with the 1300 FLOWERS marks, he should have notified 1-800-Flowers and asked for evidence or submissions going to the issues under section 44(3) and (4) of the TMA. However, the Federal Court found it was not appropriate for the Examiner to consider matters under section 44 in determining whether to revoke acceptance of an application under section 38. The delegate's focus was with error in the examination process. That is, "the delegate was not considering whether or not the applications for registration should be rejected, but whether there was an error in accepting them." Interestingly, the Federal Court also found in evidence that at the Hearing, the representative for 1-800-Flowers made a forensic choice not to address the delegate on the question of section 44.

In its reasoning, the Federal Court reviewed the explanatory memorandum for the Intellectual Property Laws Amendment Act 2006 (Cth) (which amended section 38) and found that Parliament did not intend to require the Registrar to take into account the matters relied upon by 1-800-Flowers or the matters referred to in subsections 44(3) and (4). The Court found support in this view on the basis that the effect of the delegate's decision was to trigger a whole new examination process where all of these relevant circumstances can be considered.

Was a decision so unreasonable that no reasonable person could make it?

1-800-Flowers argued that the delegate's decision under section 38 was on the premise that the 1300 FLOWERS marks were deceptively similar to the 1800 FLOWERS.COM Marks. As a matter of logic, all of the 1300 FLOWERS marks should not be registered in the face of the Prior Tulip Mark. In this case, there would be no obstacles to registration of the 1800 FLOWERS.COM Marks. However, the Federal Court noted that a trade mark may be accepted for registration even if it is substantially identical with or deceptively similar to a registered trade mark and in any case, the delegate did not make any findings about whether or not Flowerscorp's marks should be registered. Moreover, it was reasonable for the delegate to consider the prior 1300 FLOWERS marks. The delegate's task "was to inquire into the decision of the Examiner to accept for registration the two 1800 FLOWERS.COM Marks."

Did the delegate identify the wrong issue?

1-800-Flowers argued that the delegate had found its Prior Tulip Mark had been registered in error and that it was irrelevant for him to take into account this error. However, the Federal Court found there was nothing to indicate the delegate had come to this view and even if it did, it wasn't an irrelevant consideration. The Court noted that the discretion under section 38 "is unconfined in its terms."

Reluctance to intervene in Registrar's power

Section 16(1) of the ADJA Act gives the Federal Court the discretion to make no order at all, even if the grounds of review are made out. Whilst it was strictly unnecessary for the Federal Court to deal with this question, in passing comment, the Federal Court nevertheless said it would have exercised the discretion to refuse relief. This was because the Federal Court considered a decision made by the Registrar was not determinative of the Applicant's rights. The effect of the Registrar's decision was to require the applications to be examined afresh. At this point, the Applicant's concerns could be put before the Examiner. If the application was rejected, the Applicant still then had the right to an appeal which in its nature was a hearing de novo.

Lessons for trade mark owners

This case confirms that the Registrar has a wide power to revoke acceptance under section 38 of the TMA but that there are some matters which are not appropriate to be considered in the exercise of this discretion, notably matters relevant to determining acceptance of applications under sections 44(3) and (4). On the one hand, the comments of the Federal Court indicate a clear unwillingness to intervene in the Registrar's discretion. However, this is probably because the power to revoke is not determinative of substantive issues surrounding acceptance of a trade mark. From a practical perspective, the decision confirms that requesting the Registrar exercise its discretion and revoke acceptance under section 38 can be a valuable tactical tool employed by a potential opponent.

Compare jurisdictions: Arbitration

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